Meeting customer needs 1.1

Question 1

Definition of a mass market

Answer 1

Mass markets are aimed at the general population

Question 2

Definition of a niche market

Answer 2

A niche market is a subset of the main market and addresses a specialist need.

Question 3

2 advantages of mass market

Answer 3

Large volume of sales

Large scale production means economies of scale.

Question 4

2 disadvantages of mass market

Answer 4

lots of competition

Products need to be differentiated through markets which can be expensive.

Question 5

2 advantages of a niche market

Answer 5

The ability to charge a premium price

Small scale production means they are flexible to follow trends.

Question 6

2 disadvantages of a niche market

Answer 6

Risky
Demand may not be constant
Higher unit costs so no economies of scale.

Question 7

What is the definition of dynamic markets

Answer 7

A market that is subject to rapid and continuous changes. Companies have to predict any upcoming trends.

Question 8

4 ways when examining dynamic markets

Answer 8

Online retailing
Product innovation
How markets change
Adapting to change

Question 9

Pros of online retailing

Answer 9

Flexible and easy to set up, Can reach international markets- longer trading hours
Research can be conducted, eg identifying what items have been viewed the most

Question 10

Cons of online retailing

Answer 10

My not be accessible to older people
Risk of fraud and viruses
It is competitive, so more expensive to stand out.

Question 11

How do markets change

Answer 11

Change in demographics
Change in consumers preferences
Change in legislation
Competition

Question 12

What is product innovation

Answer 12

Adapting/Improving existing products

Question 13

What is market growth

Answer 13

Measurement of the change in the entire market

Question 14

What is product orientation

Answer 14

This is when a business looks at the products or production process of a good - what the business is good at doing

Question 15

Market orientation

Answer 15

This is when a businesses considers customers needs and wants

Question 16

What is primary research. Provide examples

Answer 16

Collecting first-hand data, new data, specific to the needs of the business.
Focus groups, surveys + questionnaires, observations, interviews, test marketing

Question 17

What is secondary research. Provide examples

Answer 17

Gathering data that already exists - third parties

Trade publications, market reports, google, internal transactional data.

Question 18

Benefits of primary research

Answer 18

Detailed insights, privately kept and focused on research objectives

Question 19

Drawbacks of primary research

Answer 19

Time consuming and costly, risk of survey bias

Question 20

Drawbacks of secondary research

Answer 20

Quickly become out of date therefore useless, No tailored to business needs.

Question 21

Definition of Quantitative

Answer 21

Statistical and based upon data of large samples

Question 22

Definition of Qualitative

Answer 22

Beliefs, attitudes and intentions

Question 23

Benefits of quantitative data

Answer 23

Easy to analyse, numerical data provides insights into trends, compared with other data sources

Question 24

Drawbacks of quantitative data

Answer 24

Lacks reliability, no explanation on numerical data and doesn’t focus on expectations

Question 25

Benefits of qualitative data

Answer 25

Gives a clear insight to consumer needs and wants, important for new product developments and launches

Question 26

Drawbacks of qualitative data

Answer 26

Based on opinions so risky that it is not representative, expensive to collect and to analyse.

Question 27

Define market segmentation

Answer 27

The process of dividing potential customers into different groups based on demographic such as: age, gender, income.

Question 28

Importance of market segmentation

Answer 28

Choosing marketing mix, choosing promotion and market mapping.

Question 29

Benefits of market segmentation

Answer 29

Better matching to consumer needs and wants, enhanced profits, opportunities for growth.

Question 30

Benefits of secondary research

Answer 30

Free and easy to obtain | Good source of market insights

Question 31

What is market mapping?

Answer 31

Illustrating the range of positions that a product can take in a market bases on two dimensions that are important to customers.

Question 32

Give 4 examples of dimensions for market mapping:

Answer 32

``` Low price vs high price Low volume vs high volume Unhealthy vs healthy Necessary vs complex Low tech vs High tech ```

Question 33

Advantages for market mapping.

Answer 33

Helps spots gaps in the market Analysing competitors and where they are positioned within the market Encourages use of market research

Question 34

Disadvantages for market mapping

Answer 34

A gap in the market doesn't mean there is demand for the product No guarantee for success How reliable is the market research?

Question 35

What is meant by adding value?

Answer 35

The difference between the price of the finished service. This is where value is added.

Question 36

How can you add value?

Answer 36

Build brand. Deliver excellent customer service Add product features and benefits that customers want Operate efficiently.

Question 37

Benefits of adding value

Answer 37

You can charge a higher price Differentiation between competitors Firms can increase sales volume- Greater economies of scale can lower unit costs to maximise revenue